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Thought Leadership

How brands can succeed with social purpose

How brands can succeed with social purpose:

A look at brands’ evolving commitment to cause

Marie Minyo, Executive Director, Client Services, Landor

Consumers have long expected the brands they support to care about more than their bottom lines. They want them to have a greater purpose and contribute to the communities in which they do business. But consumers’ expectations on how brands can adequately fulfill their social obligations is rapidly evolving as our society faces increasingly complex issues in a more transparent, more vocal, and more social media-dominated environment.

Corporate social responsibility has existed since the 1950s. Customers began by demanding that companies do more than check a social purpose box by simply donating money to a cause. They looked for companies whose activities were truly authentic and meaningfully aligned with the brand’s identity and core values. For example, in 1996 General Mills launched Box Tops for Education, asking Americans to collect cereal box tops to benefit schools. More recently, after Hurricanes Harvey and Florence, Budweiser and Millers Coors stopped brewing beer, started canning water, and used their logistics capabilities to deliver it to impacted areas. Staples donates to DonorsChoose.org, which helps fund teachers’ classrooms projects.

Consumers have also cheered and supported companies that had social purpose embedded in their original business model. Companies like TOMS Shoes gives a pair of shoes to an impoverished child for every pair sold, while Warby Parker gives eyeglasses to those in need. These companies quickly became favorites, especially for younger customers.

Older brands, not founded on a specific social issue, have also adopted platforms that resonate with their brand promise. Dove created the Real Beauty campaign to celebrate women of all body types and skin colors. Patagonia launched a variety of initiatives dedicated to saving the planet. Two of the better-known campaigns are Patagonia Action Works, which informs about environmental issues in given areas, and Worn Wear, which allows customers to buy and sell used Patagonia clothing.

Today, consumers’ expectations of social purpose fulfillment are shifting again, not only impacting which brands they support, but also companies at which they work. As we all know, our nation is becoming more and more polarized. A myriad of socials issues, including immigration, racial equality, women’s rights and gun control, are front and center in the media. Many Americans have taken to voicing their own personal viewpoints, especially on social media.

In such an environment, people want to know that their favorite brands share their values. They want to work for companies whose values are not just written on a poster but embedded in the work culture.

And if a social issue takes hold of the national discussion that resonates with a particular brand’s identity, a company cannot afford to sit on the sidelines. Look at Uber and Lyft during the New York Taxi Workers Strike. Uber continued to pick up passengers and even eliminated surge pricing, actions which propelled consumers to start the #DeleteUber social campaign. Meanwhile Lyft gained support from riders as its CEO donated one million dollars to the ACLU.

The answer for many brands is clear. They need to build cultures that reflect their values, beliefs, align themselves with the hopes and aspirations of their customers, and be prepared to take a vocal stand when action becomes necessary and true to the promises they’ve made.

In today’s climate, consumers want to know that the brands they support, and their employers share the same values on topics that hit close to home. For companies, saying and doing nothing can be just as detrimental as saying the wrong thing. But taking part in a controversial discussion presents a risk, and it is vital that brands weigh the risks and rewarding before throwing their hats into the ring.

Growing Through Brand Activism

When should a brand take a stand? This needs to be strategic decision around an issue that aligns with the company’s core values. Sharing a political opinion is bound to attract significant attention for the brand, both from customers and the media, and the attention garnered is also likely to be polarized. If a brand can link its position on the issue back to its brand essence and its reason for being, the stance will seem more genuine and harder to refute. For example, in response to the tragedy at Marjory Stoneman Douglas High School, Dick’s Sporting Goods raised the minimum age for purchasing guns to 21 and stopped selling high-capacity magazines. Many consumers and members of the press praised the retailer’s actions. And although critics predicted it would lose customers, that did not happen.

Brands also need to prepare themselves for the backlash. If you take a side on an issue, there will be some who disagree. Though opposition may be loud, often there is a quieter but larger consumer base that agrees. After Nike aired its commercial featuring Colin Kaepernick, social media blew up with people cutting and burning their Nike clothes. But Nike has always supported professional and amateur athletes both on and off the field. The company has a history of standing by its spokespeople even in the wake of controversy—and consumers responded. The company’s product orders rose 27 percent after the ad debuted and its stock increased 6.2 percent.

As brands evolve and adapt to meet business goals, certain social issues might naturally align with its overall objectives, but also might cause an initial drop in revenue. In 2014, CVS announced its commitment to transform itself into a healthcare brand; however, the retailer still sold cigarettes and other tobacco products. Banning the sale of tobacco was forecasted to lose the company about $2 billion in revenue. But CVS knew it could not authentically become a healthcare brand while selling carcinogenic products. The brand stopped selling tobacco and started programs to help its customers quit smoking. While CVS ended up losing its tobacco revenue, its overall sales are up today from business related to the Affordable Healthcare Act, pharmacy management, and other medical services businesses.

As consumers’ expectations of brands’ social responsibility continues to evolve and become more complex, it’s important that brands understand that consumers demand more of the companies they support. Brands not only have to give something back to society, but they also have to stand up for the values they instill within their brands. Although weighing in on controversial issues presents risks, it can be riskier for companies to remain silent.